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Bill Barrett Corp. of Denver set a production record in the first quarter, producing 13.1 Bcfe (146 MMcfe/d average). This is a 55% increase from the first quarter of 2005 and a 10% increase from last year's fourth quarter. The vast majority of Barrett's production is gas.

Including the effects of hedging, the company's average realized price was $7.42/Mcfe, up from $5.98/Mcfe in the first quarter of 2005.

"We are extremely pleased with our execution in early 2006," said CEO Fred Barrett. "We had strong production growth, particularly in the Piceance and West Tavaputs areas. We had another exploration success in Lake Canyon. And we closed an important strategic acquisition that enhances the value of our Powder River Basin properties. Our well performance in the Piceance and West Tavaputs continues to improve, and we have considerably increased our 2006 production guidance."

Barrett's quarterly net income was up sharply to $22.1 million from $3.1 million in the first quarter of 2005. Earnings per share were 50 cents, up from 7 cents in the first quarter of 2005.

Guidance for the second quarter has Barrett producing 12 to 12.5 Bcfe. Full-year guidance projects production of 46.5 to 49.5 Bcfe. Barrett said it expects to participate in the drilling of 492 gross wells during 2006. Of these, 337 are planned coalbed methane wells in the Powder River Basin. Excluding the approximately $80 million price for the acquisition of CH4 Corp., net capital expenditures in 2006 are not expected to exceed the $350 million net capital budget, of which approximately $105 million is related to the Uinta Basin, $130 million to the Piceance Basin, $35 million to the Wind River Basin, $30 million to the Powder River Basin, $30 million to the Williston Basin, and $20 million for other budget items.

Also, Barrett closed on its acquisition of CH4 last week. It acquired the company for about $82 million, including $3 million of associated working capital (see NGI, April 17). The acquisition was funded with borrowings under Barrett's revolving line of credit. CH4 operates and has leasehold in the Big George coalbed methane play of the Powder River Basin.

CH4 Corp. adds to Barrett about 85,500 gross undeveloped acres (51,900 net undeveloped acres) in the play, including acreage in the Hartzog Draw area. The acquired properties are producing approximately 6 MMcf/d (net) from 163 gross producing wells. Another 128 gross wells are in progress or dewatering. Barrett estimated that proved reserves are 11 Bcf and probable and possible reserves are 50.4 Bcf as of the effective date of the acquisition, March 1, 2006.

"Furthermore," Barrett said in the company's earnings news release, "we are encouraged by receiving unprecedented approval to drill eight wells in the winter months in West Tavaputs and currently have two shallow and one deep rig drilling in the area."

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Natural Gas Intelligence (NGI), is a leading provider of natural gas, shale news and market information for the deregulated North American natural gas industry. Since the first issue of Natural Gas Intelligence was published in 1981, NGI has provided key pricing and data relied upon daily by thousands of industry participants in the U.S, Canada and Mexico as well as Central and South America, Europe and Asia.